UPDATE: OFT launch formal investigation into GB Oils distribution in Western Isles

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The Office of Fair Trading (OFT) has launched a formal investigation into the distribution of road fuels in the Western Isles by GB Oils Limited (‘GB Oils’).

The investigation is under Chapter II of the Competition Act 1998 and relates to a suspected exclusionary abuse of a dominant position in the relevant market.

The subject matter of the investigation concerns the contractual arrangements for wholesale supply of road fuels in the Western Isles offered by GB Oils (where applicable trading under the name Scottish Fuels or through one of its group companies), the rebates paid to filling station customers in the Western Isles by GB Oils and any other payments that may have been made to filling station customers in the Western Isles by GB Oils.

The OFT say the current investigation does not relate to excessive pricing and has not been prompted by the OFT’s previous review of pricing, Petrol and Diesel Pricing in the Scottish Islands.

This case is at an early stage and no assumption should be made that there has been an infringement of competition law.

The Initial investigation will include information gathering, including issuance of formal or informal information requests and parties’ responses.

In February and March it will include OFT analysis and review of parties’ responses to information requests.

There will also be a State of Play meeting followed by a decision in April as to whether to proceed with the investigation or to close it.

Western Isles MP Angus MacNeil said: “I welcome this news, I’ve been calling for this for years. What we need now is a root and branch investigation in to what is going on in the Hebrides.”

The news was also welcomed by Comhairle nan Eilean Siar. A spokesperson said: “The Comhairle has long pushed for a forensic investigation into the supply of road fuels in the Outer Hebrides and in particular for a greater level of openness and transparency in the operation of the road fuels market. Through this it is to be hoped it can be established why there is such a differential between mainland and island prices. It is clear that there is little community confidence in the operation of the market and this investigation will hopefully help deliver the required transparency. The Comhairle welcomes the OFT’s timetable and looks forward to seeing the outcome of this investigation.”